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modation with the western powers. The Austrian Government, in its anxiety to be
rid of the Soviet occupation troops, will probably exert pressure on the western powers
to reach agreement with the USSR even at the expense of permitting the USSR to
retain considerable influence over the Austrian economy.
9. SATELLITE STATES.
There are increasing indications that Soviet policy in the Balkans and Central
Europe does not envisage the establishment in the near future of either a Balkan or a
Balkan-Danubian Federation. PRAVDA may have taken occasion to disavow Dimitrov's
public announcement of the imminent formation of a Balkan-Danubian Federation (in-
cluding Czechoslovakia and Poland) because the scope of the proposed federation might
arouse the apprehension of the Czechs and the Poles. It seems likely, however, that
the USSR will oppose any kind of federation whose leaders might develop a dangerous
degree of independence and will continue, for security reasons, to exercise its control
over the Satellites through direct economic and Party ties with each individual state.
The recently concluded long-term trade agreements with Poland and Czechoslovakia
and the tightening of direct Soviet economic controls in Hungary and Rumania indicate
clearly that inter-Satellite trade is being subordinated to Soviet-Satellite trade. The
system of Satellite mutual assistance pacts, therefore, appears to be designed primarily
to coordinate and integrate the Satellites' armed forces with those of the USSR and to
bind together the Satellite States for unified action in the event of war, rather than to
provide the machinery for political federation.
THE NEAR AND MIDDLE EAST
10. GREECE.
It remains probable that the Satellite States will withhold formal recognition of
the Markos "Government" until it is firmly established on Greek soil. Nevertheless,
they are increasing their moral and material aid to Markos. Their support is openly
manifested in vitriolic propaganda against the Athens Government and its "imperial-
istic" US supporters and in public drives to collect clothing and supplies for the "demo-
cratic" army. Meanwhile, there are further indications that greater Satellite military
aid will be forthcoming, particularly with reference to the supply of technical
equipment.
The guerrillas have made no recent attacks on the scale of the December Konitsa
battle. However, they have retained the offensive and have made sharp attacks over
wide areas. The army, hampered by winter weather and uncertainty resulting from
recent changes in the high command, has remained on the defensive. Stronger guer-
rilla attacks may be expected before the Greek Army can begin a spring offensive.
In Athens intense partisanship, despite the continuing national danger, renders
uncertain the stability of the existing coalition government.
11. PALESTINE.
Determined Arab resistance to partition, British refusal to facilitate any action not
acceptable to both Arabs and Jews, and the actual state of disorganization in Palestine
DECLASSIFIED
E. O. 11652, Sec. 3(E) and 5(D) or (E)
SECRET
C.I.R. OSD letter,
7
By NLT- HC $ NARS Date 4-18-77
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"ocrText": "SECRET\nmodation with the western powers. The Austrian Government, in its anxiety to be\nrid of the Soviet occupation troops, will probably exert pressure on the western powers\nto reach agreement with the USSR even at the expense of permitting the USSR to\nretain considerable influence over the Austrian economy.\n9. SATELLITE STATES.\nThere are increasing indications that Soviet policy in the Balkans and Central\nEurope does not envisage the establishment in the near future of either a Balkan or a\nBalkan-Danubian Federation. PRAVDA may have taken occasion to disavow Dimitrov's\npublic announcement of the imminent formation of a Balkan-Danubian Federation (in-\ncluding Czechoslovakia and Poland) because the scope of the proposed federation might\narouse the apprehension of the Czechs and the Poles. It seems likely, however, that\nthe USSR will oppose any kind of federation whose leaders might develop a dangerous\ndegree of independence and will continue, for security reasons, to exercise its control\nover the Satellites through direct economic and Party ties with each individual state.\nThe recently concluded long-term trade agreements with Poland and Czechoslovakia\nand the tightening of direct Soviet economic controls in Hungary and Rumania indicate\nclearly that inter-Satellite trade is being subordinated to Soviet-Satellite trade. The\nsystem of Satellite mutual assistance pacts, therefore, appears to be designed primarily\nto coordinate and integrate the Satellites' armed forces with those of the USSR and to\nbind together the Satellite States for unified action in the event of war, rather than to\nprovide the machinery for political federation.\nTHE NEAR AND MIDDLE EAST\n10. GREECE.\nIt remains probable that the Satellite States will withhold formal recognition of\nthe Markos \"Government\" until it is firmly established on Greek soil. Nevertheless,\nthey are increasing their moral and material aid to Markos. Their support is openly\nmanifested in vitriolic propaganda against the Athens Government and its \"imperial-\nistic\" US supporters and in public drives to collect clothing and supplies for the \"demo-\ncratic\" army. Meanwhile, there are further indications that greater Satellite military\naid will be forthcoming, particularly with reference to the supply of technical\nequipment.\nThe guerrillas have made no recent attacks on the scale of the December Konitsa\nbattle. However, they have retained the offensive and have made sharp attacks over\nwide areas. The army, hampered by winter weather and uncertainty resulting from\nrecent changes in the high command, has remained on the defensive. Stronger guer-\nrilla attacks may be expected before the Greek Army can begin a spring offensive.\nIn Athens intense partisanship, despite the continuing national danger, renders\nuncertain the stability of the existing coalition government.\n11. PALESTINE.\nDetermined Arab resistance to partition, British refusal to facilitate any action not\nacceptable to both Arabs and Jews, and the actual state of disorganization in Palestine\nDECLASSIFIED\nE. O. 11652, Sec. 3(E) and 5(D) or (E)\nSECRET\nC.I.R. OSD letter,\n7\nBy NLT- HC $ NARS Date 4-18-77"
}